Chaos Labs - MAI Depeg Update


Over the past 24 hours, MAI has experienced high volatility, with prices reaching a low of nearly 0.91$. This turbulence is most likely attributed to the ongoing repercussions from the Multi Chain Fantom Bridge incident, where Fantom collateral assets used for minting MAI were compromised.

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Given the current composition of MAI backing and Aave’s exposure to MAI, we did not recommend any immediate emergency actions.

However, as the market continues to evolve, we propose a cautious strategy of limiting Aave’s exposure to MAI. This can be achieved by implementing temporary actions such as reducing supply caps and debt ceilings across the various deployments. This approach could provide a safeguard against further potential disruptions while maintaining a balanced ecosystem. We will follow up with a separate ARFC with the proposed parameter updates.

MAI Exposure on Aave

MAI is listed in isolation mode on Aave V3 on Polygon, Arbitrum, Avalanche, and Optimism.

The following table provides a breakdown of the MAI parameters and their utilization across these deployments (please note that the data is accurate as of the time of this post)

Chain Current supplied Supply Cap Current borrows Borrow Cap Utilization Borrowed Against ($) Debt Ceiling ($) LT Emode LT
Arbitrum 324,040 4,800,000 255,330 2,400,000 78% 88,350 1,200,000 80% not in emode
Avalanche 17,750 700,000 8,776 460,000 49% 132 2,000,000 80% 97.5%
Optimism 643,670 7,600,000 525,360 2,500,000 82% 38,650 1,900,000 80% not in emode
Polygon 906,240 2,200,000 699,660 1,200,000 77% 430,000 2,000,000 80% 95%
Overall 1,891,700 15,300,000 1,489,100 6,560,000 557,132 7,100,000


At this time, Aave experienced a total of 46 liquidation events, exclusively on Polygon, with a total value of ~$48,000. All positions which were liquidated were E-Mode positions of MAI - USDC with no bad debt observed.

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